Faced with the risk of limited production capacity, Yingjixin rushes to take the IPO of the Sci-tech Innovation Board

Capital State learned that Shenzhen Injixin Technology Co., Ltd. (hereinafter referred to as "Injixin") broke through the IPO application on the Sci-tech Innovation Board and was accepted by the Shanghai Stock Exchange on June 10.

Injixin is a high-performance, high-quality digital-analog hybrid chip design company. Its main business is power management and fast charging protocol chip research and development and sales. Its industry is computer, communication, and other electronic equipment manufacturing. At present, the company has become one of the main power management chip and fast charging protocol chip suppliers in the consumer electronics market based on its advantageous position in the application fields of mobile power (i.e. power bank) and fast charging source adapters (i.e. chargers, charging heads). One. While consolidating the dominant position of mobile power chips, fast charging protocol chips, car charger chips, wireless charging chips, TWS headset chips, etc., the company will continue to deploy in the directions of intelligent audio processing, household appliances, Internet of Things, and automotive electronics in the future.

Financial data shows that the company's revenue in 2018, 2019, and 2020 were 217 million yuan, 348 million yuan, and 389 million yuan, respectively; the corresponding net profits for the same period were 27,358,600 yuan and 1,601, respectively. 750,000 yuan and 62,060,200 yuan.

According to the "Audit Report" issued by CPA Rong Cheng, the issuer achieved operating income of RMB 389.269 million in 2020, and the net profit attributable to shareholders of the parent company in 2019 and 2020 (calculated based on the lower of non-recurring gains and losses) (Basis) is RMB 16,119,300 and RMB 61,939,400 respectively. At the same time, considering the valuation of companies with the same A-share industry classification as the issuer in the domestic market and the issuer’s financing valuation in August 2020 (the capital increase corresponds to the issuer’s post-investment valuation of 2.620 billion yuan), it is expected The market value of the issuer after issuance shall not be less than RMB 1 billion.

Therefore, by Article 22 of the "Shanghai Stock Exchange, Science and Technology Innovation Board Stock Issuance and Listing Review Rules", the specific listing criteria selected by the issuer is "(1) The estimated market value is not less than RMB 1 billion, and the net profit in the last two years is not less than RMB 1 billion. All are positive and the accumulated net profit is not less than RMB 50 million, or the estimated market value is not less than RMB 1 billion, the net profit in the most recent year is positive and the operating income is not less than RMB 100 million.”

Injixin said frankly that the company faces risks such as intellectual property rights, a decline in gross profit margin, and fluctuations in operating performance.

(1) Intellectual property risks

Since its establishment, the company has always adhered to its independent innovation research and development strategy and has applied for a number of intellectual property rights such as invention patents, utility model patents, and integrated circuit layout design exclusive rights to protect its legitimate interests. These intellectual property rights have played an important role in the company's operations. . However, considering the particularity of intellectual property rights, third-party infringement of the company’s intellectual property rights may still occur, and infringement information is difficult to obtain in time, and the cost of rights protection is high, which may adversely affect the company’s normal business operations. At the same time, it is not ruled out that a small number of competitors adopt litigation strategies and use intellectual property-related litigation to delay the company's market expansion. As of the signing date of this prospectus, the issuer has outstanding intellectual property rights disputes. For details, please refer to "3. Litigation or Arbitration" of "Section 11 Other Important Matters" in this prospectus. There is a possibility that the issuer may lose the lawsuit due to the unresolved intellectual property ownership disputes. At the same time, the possibility that the company's competitors or other third parties may have intellectual property disputes with the company cannot be ruled out. If the above matters occur, it will have an adverse impact on the company's normal business operations.

(2) Risk of declining gross profit margin

The downstream application areas of the company's products are mainly consumer electronics, and consumer electronics products are updated quickly, and chip products for the consumer electronics market can get a higher gross profit in the initial stage of listing, but as time goes by, the price gradually decreases, and the gross profit margin Generally showing a downward trend. During the reporting period, the company's main business gross profit margin was 38.64%, 38.84%, and 36.07%, respectively. In order to keep up with changes in market trends, the company needs to continue to carry out technological innovation and product upgrades. If the company fails to update existing products in a timely manner according to market demand or launch new products that meet market trends, product prices may fall and the proportion of high-margin product sales may occur. The decline and other circumstances have led to fluctuations in the company's comprehensive gross profit rate, which adversely affected the company's operating performance.

(3) Risk of fluctuations in operating performance

In 2018, 2019, and 2020, the company's operating income was 216,67,700 yuan, 348.047 million yuan, and 389,169,900 yuan, respectively, with a compound annual growth rate of 34.04%; attributable after deducting non-recurring gains and losses The net profits of shareholders of the parent company were RMB 34,231,200, RMB 63,096,000 and RMB 61,939,400, respectively, with a compound annual growth rate of 34.52%.

During the reporting period, the company's downstream market grew rapidly, the company continued to launch new products that met customer needs, and its performance continued to grow. However, the domestic integrated circuit design industry is developing rapidly, and the good prospects have attracted more new entrants to participate in market competition. The original manufacturers in the industry are actively exploring the market on the basis of consolidating their own competitive advantages, and the market competition continues to intensify. At the same time, the company's products are mainly used in the field of consumer electronics, the market competition is fierce, and the technology and product update speed is fast, requiring the company to timely and accurately grasp the market trend changes and quickly carry out technology and product development. Although the company has achieved a certain market share and brand awareness in the industry after years of technology and sales accumulation, and brand building, it has already possessed a certain competitive advantage but compared with large manufacturers in the industry, the company still has certain improvements in all aspects. space. If the company fails to accurately grasp the dynamic changes of market demand and industry development trends in the future, the company's R&D results are not up to expectations, it is affected by risk factors such as changes in the market environment, or future market development is limited, which may cause the company's performance growth trend to be unsustainable. There is a risk of volatility in future operating performance.

(4) Risk of international trade friction

In recent years, international trade frictions have been escalating. Relevant countries have promulgated a series of export control policies for China in semiconductor equipment, materials, technology, and other related fields, restricting Chinese companies access to materials, technologies, and services related to the semiconductor industry. The company currently has a large number of overseas purchases. The company's main suppliers such as GlobalFoundries and TSMC are all overseas manufacturers. The above export control policies may cause them to supply or provide services to the company to be restricted. Although the company can choose domestic suppliers to replace production, it still needs to switch costs and run-in cycles. Therefore, once the supplier's supply is restricted due to international trade frictions, the company's normal production and operation will be adversely affected.

(5) Risk of high supplier concentration

The company adopts the Fabless business model and is mainly engaged in chip design and sales. The production links such as wafer manufacturing, packaging, and testing are handed over to wafer manufacturers and packaging and testing manufacturers to complete. The wafer manufacturing and packaging and testing industries have large capital investment, high technical thresholds, and high industry concentration. Therefore, the company's suppliers are relatively concentrated.

During the reporting period, the company's purchases from the top five suppliers accounted for 92.11%, 91.32%, and 90.00% of the total purchases in the current period, respectively. If major suppliers suspend production or supply interruptions due to emergencies such as natural disasters, major accidents, or changes in the international political situation, it may affect chip manufacturing and delivery on schedule; in addition, wafer procurement and packaging and testing costs are the main components of the company's operating costs If the above-mentioned major suppliers have adverse changes in their own business operations, cannot adjust their production capacity in time to meet the company's procurement needs, or stop supplying the company due to other force majeure factors, it may have an adverse impact on the company's operating results.

(6) Risk of capacity restriction caused by market supply and demand imbalance

Recently, due to changes in market supply and demand, there has been a shortage of water supply in the industry, and IC design vendors are generally facing tight wafer manufacturing and packaging and testing capacity. Although the company has made corresponding countermeasures to lock part of its production capacity and guarantee the supply of production capacity, there is still the possibility that the company's supply chain will be tight and procurement costs may increase due to changes in the international political and economic environment, fluctuations in chip market demand, and price changes. At the same time, if the capacity shortage of upstream manufacturers such as wafers and packaging and testing continues to intensify in the future, it may cause the company to have the risk of capacity limitation, which will adversely affect the company's daily operations and profitability.

(7) The risk of insufficient continuous innovation ability

With the continuous expansion of downstream application fields, the application scenarios of integrated circuits have become more and more extensive. In order to adapt to market changes, continuous innovation has become an important means for companies in the industry to maintain their market positions. The company needs to continuously conduct R&D and innovation in accordance with technological development trends and changes in customer needs, and maintain market competitiveness by continuously launching products that meet customer needs and possess advanced technology.

During the reporting period, the company’s R&D expenses were RMB 33,227,500, RMB 44,260,500, and RMB 50.65 million, accounting for 15.34%, 12.72%, and 13.01% of operating income, respectively. The company's products need to invest a lot of money and manpower from R&D to mass production, the R&D process is long and there is a certain degree of uncertainty. If the company cannot accurately grasp the market development trend, always maintain continuous innovation capabilities, or the company's future R&D capital investment is insufficient, it may cause the company's products and technology to not meet the needs of the downstream market, which will lead to a decline in the company's market competitiveness and give the company's development Bring adverse effects.